Small and Medium Enterprises (Essay Sample)

CHAPTER ONE: INTRODUCTION
1.0. Introduction
Business has entered the era of the one-world market. Increasingly, companies both small and medium enterprises (SMEs) are going overseas to attain sales and profits unavailable to them in their home markets. As a result, every firm, including those with purely domestic operations, is facing increased pressure from foreign competitors. Overseas ventures have been transformed, and many firms are going international to market themselves and widen the market niches. This is made easier through joint ventures with existing firms in foreign countries or total takeover of subsidiary firms (Naughton, 1996). Managing change has become the order of the day for many organisations in present times in their day-to-day activities (Grieves, 2010). Majority of firms have drawn their attention in overcoming barriers to change because of consistently gains seized from such changes (Ahmed & Shepherd, 2010). According to Yasin (2005), firms have progressively developed their business activities because of easy in access of relevant information and invitation from governments of small nations that want to boost their economic growth and maintain their competitive edge. Most of the SMEs from the Europe countries, Japan and United States have been prominent in establishing up the bigger joint venture firms in parts of Africa and Asia and importantly they have enabled advanced technology transfer.
The study emphasizes the need to explore the Role of Management in the effective operation of SMEs in Chinese economy. It also affirms that management should pay more attention to improving operations and relations with existing investors and offer them incentives to help in marketing domestic investment opportunities to potential foreign investors. The emergency of international firms is perceived to be the latest developments in the last one decade, resulting from globalization of SMEs. The paper will start by proposing the research question, research aims and objectives, brief exploration of previous research that is relevant to research at hand, proposal of research design and methodology to be employed and finally the expected results for the same.
1.2. Background of the study
As working environment and practices change and circumstances evolve, SMEs are forced to review their operations to remain vibrant and maintain their competitive edge. For many workforce and organisations, coping with change, if not managing it remains to a foreseeable upshot regarding the roles and responsibilities played by various stakeholders within organisations. A number of changes may be fundamental as well as desirable to firms, although the management of it has turned out to be a big challenge for managers and a well-paid area of operation for both consultants and organization groups. Nevertheless some changes are welcomed if well deliberated to add value to organisation’s practices whereas others may be assumed if deemed inappropriate, disruptive and costly. Nowadays, majority of senior managers in several organisations around the world sign performance contracts to help gauge their contribution to success and change they bring on board during their tenure. Corporations’ directors, boards and managers should seek to achieve a balance between change and stability when taking into consideration performance upgrading, company development, re-engineering as well as revolution by concentrating upon areas of greatest opportunity for beneficial outcomes and attainment of strategic goals.
There are two key reasons (internal and external) for considerable change. The significance of this reasons put forward a souvenir highlighting the way organisations are supposed to counter and adapt to exigencies in addition to that major reform which time and again reveals that the process is imperative (Grieves, 2010). The existence of exterior peril is a leading motivating force. On the other hand, the internal justification still holds oddity that a most firms may enact measures to try and counteract its earlier agendas besides extending them where necessary. The primary feature was exterior threat, which was thought to be a dramatic memento of on the role of the environs was impacted by global businesses. There were still more complex domestic policy affairs that needed strategic and incorporated government comeback linking various firms, agencies and levels of organisation. These were jointly intractable policy problems and issues experiencing bureaucratic obstructions.
Turning back to internal factors, this is a period when advancement within the technology, public service and management restructuring cycle change to become more transparent: commencing a strong restructuring agenda for various organisations which is viewed as crucial, manifestation on the outcome that generate perfection and revaluation of the importance of change under an innovative leadership of the vital departments that coordinated diverse agendas. According to Ahmed P & Shepherd, (2010), the basics of innovative practices, incorporated disaggregation in management, decentralisation, outsourcing, as well as a multiple services providers add value to organisational change. Such features are supported specialisation other than encouraging fragmentation and reinforcing vertical structures. For management to effectively execute effective organisational change in their system, it is essential to monitor tasks, plan them and supervise resources accessible for those particular activities. In this scrutiny, it is the responsibility of the managing team to make sure that tasks to be integrated in execution are clinched on by all the workers as planned to benefit both the individuals and the organisation.
1.3. Statement of the problem
The dynamics of life nowadays has made work to become a basic to the human coexistence, though, labour these days is no more unorganised group that is ready to obey without detest or protest on terms of employment. Management has to handle workers at present as individuals with conscious minds as well as members of organised social groupings, which are well-informed on their working rights and possess strong bargaining power. Work establishes what we ought to do in our daily life and preoccupies much of our thoughts. It enhances our interactions and aid in defining our sense of identity as it offers us with material necessities of life and attainment of civilisation.
Work allocation and remuneration, together with its organisation and management are of significance importance, how these are carried out in any gainful employment explains much more about the perceptions and ideals we embrace as a society changes. For this reasons, the aim of changing and keeping sound industrial relations is not only to focus in resolving disputes but also to safeguard the cooperation among the workers in the ways of industry. In any industry, the issue of maintaining creativity and smooth innovations is not an easy task. Most industrialised nations and leading corporations around the world find themselves struggling to establish and maintain effective management changes in their systems. Each country and industry has sought to find a working solution, based upon its economic, social and political environment. Thus, the paper will explore the role of management in the effective operation of small and medium enterprises in China.
1.4. Aims and Objectives of the study
1.4.1. Aims
The procedures undertaken by small and medium enterprises are multifaceted and management plays a vital role to ensure effectiveness in such operations. This research aims to investigate the role of management in the effective operation of SMEs in Chinese economy.
1.4.1. Objectives
The research objectives for this study can be identified as following:
Determine the role of management in the effective operation of SMEs.
Establish major issues and challenges that relates to management of SMEs.
Establish critical success factors for SMEs.
Identify the management strategy of SMEs in contemporary world.
1.5. Research questions
To be able to illustrate the best way management contributes to effective operation of SMEs, the research questions for this study were to ask:
What role does management play in the management of SMEs?
What major issues and challenges does management face in operation of SMEs?
What are the critical success factors for SMEs?
What strategy is applied in management of SMEs in modern world?
1.6. Significance of the study
This study is a welcoming idea to many studies on significance of management in the operation of SMEs, of modern day in China. Consequently, it was an added advantage to the scarce resources and literature in SMEs management in different sectors of the economy. Likewise, this thesis may help uncover the un-researched information or elements in the management of small and medium enterprises, thus be an impetus for a significant control on the entire operations of SMEs in terms of critical success factors as well as the issues and challenges (Yuan & Woodman, 2010). At any given level, scholars, employers, management, stakeholders as well as the organisation as a whole will benefit from this study.
1.7. Scope of the study
This study will revolve around role of management in the effective operation of SMEs, case study of Chinese economy. Consequently, the study will be used to assess the critical success factors of SMEs. The foremost constraint under this study is existence of few studies conducted on this topic, thus making to compare the empirical findings of other researchers. As a result, the study will only give a close look in the general operations of SMEs.
1.8. Significance of the study
This study will be based on the management procedures on small and medium enterprises in Chinese economy. As working environment and pr...